Nigel Farage is stuck in traffic, so his Ukip colleagues provide the entertainment. There's John Gill, the office junior who looks alarmingly like Joy Division's Ian Curtis and whose grandfather, Tory MP Christopher Gill, was one of the original Maastricht rebels; Marta Andreasen, who was head accountant at the EU until she turned expenses whistleblower – she now looks after Ukip's finances and is a candidate in the European elections despite her Spanish passport. And then there is an extrovert middle-aged skinhead wearing jeans and shades. "So you're from the Guardian?" he says, full of bonhomie. "My brother used to work for the Guardian. That's the good news. The bad news is I hate him. He's a fucking twat. We said to him, the way you're going you'll end up at the Guardian, and he fucking well did. Twat."

I'm not sure how to respond so I ask him what his relationship to Ukip is. He thrusts out a hand for shaking. "Ah, Clive Page, head of communications." Page fails to mention he is also a convicted benefit fraudster – in 2004, he received an 80-hour community punishment order for claiming more than £5,000 on a flat he didn't live in.

These could be heady times for the United Kingdom Independence party. In 2004, they came from nowhere to win 12 seats in Europe, winning an astonishing 16% of the vote. They soon became mired in scandal and infighting, and looked a spent political force. Until the Westminster expenses scandal. Now they are expected to win at least 15 seats in the European parliament. If things go well they will remain Britain's third biggest party in Europe. If things go really well they could be the second biggest.

The irony is Ukip's raison d'etre is to oppose Europe and clamp down on immigration. They are sometimes confused with the BNP, which distresses them – they like to see themselves as the proud-to-be-British-but-not-a-single-racist-bone-in-our-body party. Meanwhile, David Cameron described them as "fruitcakes, loonies and closet racists".

There is another Ukip irony. People are expected to embrace the party as a protest vote, but the protest is likely to have nothing to do with Europe – it will be about perceived corruption in the three main parties. And one final irony – Ukip have potentially the dodgiest financial record of all; of its 12 MEPS one, former policeman Tom Wise, has been charged with money laundering and false accounting, while another, Ashley Mote, elected for Ukip in 2004 before becoming an independent, was jailed for benefit fraud in 2007. Meanwhile, the party voted against increased EU transparency over expenses, and Farage boasts that he has taken £2m of taxpayers' money in expenses and allowances in his 10 years as an MEP.

Ukip HQ comprises two scruffy rooms on the fifth floor of a grand building in central London. The photographer asks if he will stand in front of the 6ft union flag in the corner of the office. "No, not in front of the union jack," says Page on Farage's behalf. "That's just a joke thing."

I ask Page to explain the joke. "No, it's just an in-joke."

Photo taken, against a neutral background, Farage decides it's time for sustenance. As he crosses the road, a black-cab driver hoots his support. Farage gives him the thumbs-up. "A few haven't charged me, yes. They say, 'We're behind you mate.' Yes, it's quite funny."

He leads me to a pub, a few yards from New Scotland Yard. "Ah, breakfast!" he says. (Actually, it's lunchtime.) "I've not eaten for two days."

What does he fancy? "A pint of Landlord I would have thought, wouldn't you? You want one. Right, goody good. Excellent." He's famous for his drinking. Ukip enemies within (of which there have been many) minuted that he turned up for meetings smelling of alcohol and suggested he had a drink problem. Farage said yes, he enjoyed his drink but no, he did not regard it as a problem.

A stranger at the bar greets him cordially. Farage returns the compliment. "Keep the pound! Absolutely sir! Very good. Very good! Absolutely. Hello, two Landlord please."

He suggests we go outside so he can smoke. Most Ukip members seem to smoke – probably on principle as much as anything. He sits down, sups his pint, licks his lips, lights his Hamlet. "Terrible legislation, not to have the choice on smoking. Why all the pubs are closing. Terrible. So, what are you after?" He resembles two distinct television characters – when he does the military precision schtick he could be Captain Mainwaring in Dad's Army. At other times, with his camp elongated vowels ("ooooh, noooooooah!") he comes over all Frankie Howerd.

Farage grew up in London. His father was a stockbroker, his mother came from a family of senior policemen. He attended a private school, Dulwich college, and says it was a wonderful mix of colours and social classes (many of the boys had won free scholarships). Farage calls it a perfect example of integration. Just down the road, though, when he was 16, he witnessed an example of imperfect integration – the Brixton riots terrified him. "It was the breakdown of law and order. Actually, my school was used as the police HQ. I did think then if you allow things to happen on too great a scale too quickly, it will lead to problems, and to some extent we have seen that. Enoch touched on that."

When I ask him who his political hero is, he instantly cites Powell, the rightwing Conservative who made the famous speech about immigration anticipating "rivers of blood". "Enoch Powell was an extraordinary fellow. I admired him for having the guts to talk about an issue that seemed to be to be really rather important – immigration, society, how do we want to live in this country."

Farage didn't bother with university – he was an aspiring Thatcherite, desperate to make his fortune. "It's all happening, buzzing, yuppy time. They're all making a load of money. I've got to get in there. I can't wait till I'm 22, I'll be an old man by then."

He became a metals trader then set up his own business. In his early 20s he had a scare with testicular cancer but recovered. At 24, he was married and a father.

Farage, now 45, anticipated a life of markets and golf, but in 1990 Britain joined the European exchange rate mechanism, and he was never the same again. "I immediately went into full rant mode." Three years later he became a founder member of Ukip, in 1999 he was elected to the European parliament and in 2006 he became the party's leader.

He looks at today's privileged Tories with disgust and says he cannot believe it is the party he grew up with. "It's odd seeing a Conservative party in which somebody like Norman Tebbit could rise as a party that's almost gone back to the Macmillan era."

Tebbit recently suggested that we should not vote for the three major parties in the European elections. Is he now a signed-up member of Ukip? "No. He's said what he's said, which took some courage, but they haven't kicked him out, which he wouldn't want. It was very helpful."

I ask Farage if Ukip has its equivalent of Tebbit's cricket test – in 1990 Tebbit suggested immigrants could not show loyalty to Britain till they supported the England cricket team. Farage says that is outdated, and would prefer to flip the question. He mentions the five black and Asian candidates who have just stood for Ukip, and of whom he is inordinately proud. "They've all said the same thing – "We made a conscious decision to come to this country because we thought it had certain values and we're bringing our kids up to be British."

How useful have these non-white candidates been to him?

"Well look, when a new political movement emerges that appears to be patriotic, the assumption is that it must carry with it travellers who come from a pretty extreme disposition." Because it's been true? "Yes, oh quite right, yes absolutely. And I think to have people like this as candidates, I think we almost don't need to comment on it."

But Ukip has not wholly escaped being tarred with the BNP brush. Last November, former tennis player Buster Mottram tried to broker a deal between the two parties. "They do it all he time," Farage says. "All the time. They try to give the impression there's some level of communication going on between us knowing if that gets out our reasonable middle-class supporters will run away in droves. It's a deliberate tactic."

He stresses that Ukip and the BNP couldn't be more different – Ukip are libertarian and would legalise pretty much everything, the BNP are a hang 'em and flog 'em party. A vote for Ukip, he says, is a vote for flat income tax (and no tax for those earning less than the minimum wage averaged over a year), grammar schools, smoking, small government, and of course two fat fingers to Europe. "Being totally intertwined with European partners, socially economically, politically, makes no sense."

As it happens, Farage's own life could not be more intertwined with a European partner. His second wife, Kirsten, a former banker who now helps with Ukip, is German. I ask if their two young children are bilingual. "Isabelle is too young, but Victoria is, yes. Very much so. Yeah, yeah, yeah. That's great, that's fine. You are not going to find some anti-foreigner little Englander."

Would Kirsten have been allowed to live here if he'd had his way on immigration? "Yes, because she got a job here in the city working for a German bank. She would have come on a work permit, of course." He doesn't mention what would have happened when the permit ran out. Ukip's line on immigration is not as finely honed as it might be – it seems to run along the lines of no more foreigners unless they're EU outcasts, friends, wives or really clever/rich.

A word he uses time and again to describe politicians in the mainstream parties is "ghastly", and he doesn't hold back on his fellow leaders. Gordon Brown? "Dead man walking. Humourless. I don't like him." Nick Clegg? "Technocrat." David Cameron? "He doesn't believe in a damn thing other than he wants the keys to No 10."

Farage's mobile rings. He sounds thrilled. "Bloody marvellous! We're going to get a recommendation from the Sun. From Kelvin [Mackenzie, the paper's ex-editor]. He's going to back us." How important is that? "Very. Because he's a bloke who speaks straight and a lot of people read that column."

Does he think it's funny that Ukip will benefit from the expenses scandal? "They won't vote for us on that basis. They'll vote because they agree with our policies." What about his own £2m claim? "That's just cobblers. It's a misquote. We don't get expenses as MEPs, we get fixed-sum allowances, and 75% of that has been spent on the employment of staff."

But surely he has a responsibility to claim excessively just to show what a corrupt system it is? He grins, like a wide-mouthed frog. "I know. Which I did in the early days. I used the travel profit to back a bloke who was selling beef on the bone, all sorts of things. They came down on me like a ton of bricks."

In 2006, it was Kirsten who came down heavily on him when the tabloids published a story about his liaison with a woman called Liga from Latvia, claiming he begged her "to get MaaSTRICHT" with him during sex. At the time, Farage admitted to falling asleep at her house but nothing more. "Oh that," he says today. "It was all a bit of an error." The indiscretions of late youth? "No, just sheer stupidity."

Why have Ukip been so ridden with scandal? Inevitable, he says. "It always is when you have a small organisation that is essentially a bottom-up party. You will always get people who come in and fancy their chances of personal glory or come in from other organisations to cause maximum trouble. Yes we've suffered horribly with it, but we've won pretty much hands-down."

How has he dealt with corruption? "Ruthlessly." He makes a loud gesture of washing his hands. "You're gone. Goodbye."

Meanwhile, head of communications and convicted fraudster Page arrives at the pub to tell him it's time to go. And now Farage is merrily chatting to another man. "Vote the right way," he says.

Page concurs. "This is a Scotland Yard pub, and I tell you what – the Yard is voting Ukip."

Farage is certainly different from most British politicians. Who else would happily admit to visiting lapdancing clubs? "I don't go to lapdancing clubs," he protests for once. "I have beento lapdancing clubs. So what?" Why wouldn't other leaders admit to it? "Because they don't want to be criticised – they're living in this PC world and nobody must admit to being human. They're all purer than pure. Well, I'm not."

So has Mrs Farage put her foot down and outlawed the lapdancers? He looks at me disbelievingly, his face reddening, his pride hurt. "Noooooooooah. Noooooooooah. 'Course not. 'Course not. I've been rather busy these last few years."